Top Challenges of Payroll Processing and What to Do About Them

On the surface, managing your company’s payroll seems relatively straightforward. You collect and report hours worked and calculated wages owed, then send out paychecks and update your records. Butissues can arise that may have financially devastating consequences.

The demand for meticulous, accurate tracking, calculations, and reporting means that even a tiny error could cause unforeseen expenses. And if your business is global, these issues become more substantial to stay on top of. According to the Annual Global Payroll Survey, researchers found that 7 out of 10 (69.4%) professionals interviewed said they had gaps in global policies and processes. These tasks are never basic, and it’s important to keep the inherent challenges in mind with your own processing. What you need to know are the top challenges of payroll processing, and how to effectively overcome them to keep your business running smoothly.

Discrepancies. Are you seeing conflicts or inconsistencies in your payroll? Is one of your employees being paid differently than someone else at the same level? These mistakes are common, and take a lot of time to go back and correct. Notes and printed documents with manual recording are difficult to manage and keep track of, and miscalculations abound. Your data will often be incomplete, out-of-date, and error-prone even before it is ready to analyze.

Using a single, streamlined system is your best bet in avoiding discrepancies in your accounting. Standardize and centralize your company data. This way, your data retrieval and compliance issues can be done quickly and more accurately. Avoid a series of disparate systems which do not work together and which are prone to human error. Outsourcing your record-keeping to an accounting software will allow you to avert these potential pitfalls. And when your software system is working to unite your data, the analysis of this information will also be concise and automatic. You will find it much easier to spot potential issues when inconsistencies are laid out in this format. These time saving measures are crucial when it comes to the difference between success and failure in your business.

Data privacy laws. When you collect payroll data, it is critical that the sensitive company and customer information contained within is as protected as possible from any potential threats. Along with strict internal controls, you must comply with data privacy laws. These laws are rapidly evolving on a global scale, and for good reason: financial information is a gold mine for hackers (excuse the pun). They can use the data and personal information they retrieve to steal identities and commit further crimes. Companies and organizations are taking on tough data protections to help prevent these thefts. The GDPR (Global Data Protection Regulation) which was put into effect in the EU earlier this year means that foreign companies which handle and process the data of EU citizens have had to jump over higher bars. With most companies tightening such protections for confidential information, employers are faced with huge penalties if they breach these laws.

If you are still using hard copies or Excel sheets for your own company data, it is crucial for you to understand the implications. These systems are not secure in the slightest. Your job is to protect your company, employee, and consumer information, and manual processing leaves too much to chance. Switching over to a cloud-based software is a solid step in the right direction. Such applications come with built-in global compliances, as well as additional firewalls and monitoring systems which work 24/7 to keep your data safe.

Global compliance. Another fundamental piece of your company’s payroll system is to ensure compliance with other countries’ laws. Expanding globally is certainly a boon for business, but it comes with some specialized knowledge and careful adherence to diverse rules. As a payroll provider, you must monitor legislative changes continuously to safeguard compliance at all times. If you do not, you will pay a high price. Due to the changes across state and country lines, this is probably the top challenge for your payroll processing. International payrolls mean different tax laws. You will need to know which forms and deadlines your employees need for legal filing, what the overtime laws are, and whether or not it is legal to pay those international employees electronically. You can’t afford to move to a global payroll system without absolute compliance in any of the companies of operation.

Luckily, improved technologies and the rise of global outsourcing providers means that it is easier to follow and comply with these regulations, no matter how often they change. Vast and unpredictable legislations no longer mean you have to inhibit the growth of your company for fear of accidentally violating a law you aren’t familiar with due to the speed of changes. Certainly the growth of global business means that such processes are increasingly involved, but there are many benefits to be gleaned for your payroll if you are expanding outside of your local area. By bringing some expertise into laws and real-time compliance via a cloud-based platform, you can more easily maintain records as well as being confident that global compliance in all areas of your business is being enacted on your behalf.

Manually processing your payroll takes up a lot of valuable time and cost. Carefully checking over each detail for accuracy and legal compliance takes time and this time could be used to grow your business instead. Outsource your payroll provider to save time and be absolutely sure that you are following legislation and that your most sensitive data is secure and integrate your accounting software with a free 14-day Time Tracker trial for accurate time tracking for payroll. No credit card required.